Income Taxes (Tables)

12 Months Ended

Jan. 31, 2016

The provision (benefit) for taxes consists of the following:



	Fiscal Year Ended
(in thousands)	January 31, 2016			January 25, 2015			January 26, 2014
Current tax provision
Federal	$	—		$	749		$	3,769
State	—			—			554
Foreign	8,709			7,810			14,962
Subtotal	8,709			8,559			19,285
Deferred tax provision (benefit)
Federal	6,679			508			23,938
State	(96		)	(100		)	(1,293		)
Foreign	(6,410		)	(419		)	(5,945		)
Subtotal	173			(11		)	16,700
Provision for taxes	$	8,882		$	8,548		$	35,985

The provision (benefit) for taxes reconciles to the amount computed by applying the statutory federal rate to income before taxes as follows:



	Fiscal Year Ended
(in thousands)	January 31, 2016			January 25, 2015			January 26, 2014
Federal income tax at statutory rate	$	7,133		$	12,775		$	(44,968	)
State income taxes, net of federal benefit	(7		)	(100		)	(1,260		)
Foreign taxes at rates less than federal rates	(62		)	(11,960		)	(8,378		)
Tax credits generated	(3,598		)	(5,302		)	(5,523		)
Changes in valuation allowance	1,847			14,284			52,942
Goodwill impairment	—			—			40,840
Changes in uncertain tax positions	1,009			(5,167		)	893
Deemed dividends	276			2,513			726
Equity compensation	2,529			2,200			1,173
Permanent differences	28			(93		)	2,895
Deferred tax provision - indefinite life intangibles	5,670			—			—
Triune earn-out	(5,670		)	—			—
Revaluation of deferred tax assets and liabilities	334			(432		)	(12		)
Other	(607		)	(170		)	(3,343		)
Provision for taxes	$	8,882		$	8,548		$	35,985

The deferred tax assets and deferred tax liabilities are classified in the consolidated balance sheets as follows:



(in thousands)	January 31, 2016			January 25, 2015
Deferred tax assets
Current	$	—		$	2,478
Non-current	7,354			106
Subtotal	7,354			2,584
Deferred tax liabilities
Current	—			(1,444		)
Non-current	(6,802		)	(2,477		)
Subtotal	(6,802		)	(3,921		)
Net deferred tax assets (liabilities)	$	552		$	(1,337	)

The components of the net deferred income tax assets and liabilities at January 31, 2016 and January 25, 2015 are as follows:



(in thousands)	January 31, 2016			January 25, 2015
Current deferred tax asset:
Deferred revenue	$	—		$	3,052
Inventory reserve	—			3,156
Payroll and related accruals	—			2,306
Bad debt reserve	—			927
Accrued service fees	—			608
Other deferred assets	—			1,191
Valuation allowance	—			(8,637		)
Total current deferred tax asset	—			2,603
Non-current deferred tax asset:
Deferred revenue	4,295			—
Inventory reserve	2,931			—
Bad debt reserve	521			—
Accrued service fees	238			—
Research and development charges	584			1,323
Research credit carryforward	32,605			40,819
NOL carryforward	38,979			29,144
Payroll and related accruals	8,773			7,148
Stock-based compensation	5,006			6,176
Other deferred assets	6,281			5,054
Valuation allowance	(77,383		)	(66,899		)
Total non-current deferred tax asset	22,830			22,765
Current deferred tax liabilities:
Inventory reserve - foreign	—			(826		)
Bad debt reserve - foreign	—			(256		)
Other current deferred tax liabilities	—			(373		)
Total current deferred tax liabilities	—			(1,455		)
Non-current deferred tax liabilities:
Inventory reserve - foreign	(515		)	—
Depreciation and amortization - foreign	(194		)	—
Purchase accounting deferred tax liabilities	(16,895		)	(20,917		)
Depreciation and amortization	(3,324		)	(2,956		)
Other non-current deferred tax liabilities	(1,350		)	(1,377		)
Total non-current deferred tax liabilities	(22,278		)	(25,250		)
Net deferred tax assets (liabilities)	$	552		$	(1,337	)

Changes in the valuation allowance for the three years ended January 31, 2016 are summarized in the table below:

A reconciliation of the beginning and ending amount of unrecognized tax benefits (net of federal impact of state items) is as follows:



	Fiscal Year Ended
(in thousands)	January 31, 2016			January 25, 2015
Beginning balance	$	7,774		$	12,348
Additions based on tax positions related to the current year	1,425			466
Reductions for tax positions of prior years, net	(767		)	(3,970		)
Reductions for settlements with tax authorities, net	—			(1,070		)
Ending balance	$	8,432		$	7,774

The liability for UTP is reflected on the consolidated balance sheets as follows:



	Fiscal Year Ended
(in thousands)	January 31, 2016		January 25, 2015
Deferred tax assets - non-current	$	7,162	$	7,522
Accrued liabilities	—		—
Other long-term liabilities	1,270		252
Total accrued taxes	$	8,432	$	7,774